Should You Take Partial Insurance?

Article by Mike Anderson

I have clarified some things from the original posting, mainly that there are benefits to taking partial insurance although it’s not the optimal EV play.

In the game of black when the dealer has an Ace showing you have the options of placing an additional side bet of called the insurance bet.  It is usually signified by the dealer asking: Insurance anyone? And is no longer offered when the dealer says: Insurance is closed.  What you are betting on in the insurance bet is whether or not the dealer has a 10 as their hole card for a blackjack.  It pays of when the dealer has the natural.

This wager has a maximum bet of half the initial wager.  If your initial wager is 100 dollars then the maximum value of the insurance wager is $50.  The insurance wager has a payout of 2:1. This means that the $50 wager pays $100. When you win the insurance wager you lose the initial wager, so in most cases the cumulative wager for the round is a net push.  In cases where the player has a blackjack against a dealers Ace up card, taking insurance is also called even money.  This is where the player gets a return equal to that of their initial bet.  Even money is one option a player can take to reduce the variance that they may experience.  You are giving up some EV here but it will reduce the financial swings.

In the first paragraph I stated that the maximum insurance bet that a player can take is one-half of the original wager.  There is no rule that prohibits a player from placing a wager less than the maximum wager.  Doing this is known as taking partial insurance.  Partial insurance can be used as a hedge bet of sorts.  The benefit of taking partial insurance is to reduce the variance that a player will experience.  For anyone who has put any significant time in as an advantage gambler knows that the financial swings can be violent and can try the boundaries of your own sanity. So anything we can do to reduce these swings we take advantage of. It’s better for your bottom line, and even better for your mental state.

The foundation of partial insurance for blackjack can be applied to online casinos as well as land based casino.   In the online realm reducing variance is desirable because it allows you to prolong your free play offers that are used to lure players into playing.   An online casino will offer free play to new and returning players in place of the traditional RFB comps.  For instance 888casino is an exciting live casino with real dealers offering Live Roulette, Live Blackjack, Live Baccarat, Casino Hold’em, Three Card Poker and Caribbean Stud Poker, and they have huge selection of tables for each game. Some signup bonuses are specific to certain games while others can be used on every game the casino offers. Depending on how often you play and the wagering amount the promotional offers will vary.  When you get these offers from online casinos there are restrictions before you can withdraw the amount. The player has to play a certain number of rounds before withdrawing funds. When playing the minimum number of rounds you want to reduce the variance that you will experience during this short term play so you get the most return on the free play.  Taking partial insurance is a good way to do that.  You reduce the chances of winning more money but you also reduce the chances of losing all of the free play money.

The mathematically optimal way to play the insurance bet is bet it when the number for the given count is reach.  The index numbers provided are dependent on the card counting system being used.  Taking partial insurance reduces the EV that can be expected but it also reduces the variance.  One of the most efficient counting systems is the Uston APC count.   And it is the count that I will be using to apply the partial insurance index numbers to.  The values assigned to each card for the Uston APC count is in the table below.

Table 1- Uston APC Values

Card Value
2 1
3 2
4 2
5 3
6 2
7 2
8 1
9 -1
10 -3
Jack -3
Queen -3
King -3
Ace 0

 

The values are added up to determine the running count and then normalized to a ½ deck resolution.  For example if there is running count of +15 and 1 ½ decks remaining the true count is 5.  15 divided by 3 equals 5.  Also it should be noted that a side count of Aces is kept to help determine the betting amounts.  It is not kept to determine the playing options of hitting, standing or doubling or splitting.  Aces have a value of +3 for each Ace that the ½ deck segment is rich and -3 for each ½ deck segment is poor.  The base line is 2 Aces per ½ deck.

The table below lists the % of full insurance that is to be taken against various hands that a player can have.

Hand(s)   None 25% 50% 75% Full
BJ & Any 20   > 0.5 1 < 1.5 1.75 2
Any 19, AA, Hard 11, Hard 10   1 1.5 1.75 2 2.5
Hard 8-9, Any 18, A2-A6   < 1.5 1.75 2 2.5 2.75
Hard 4-12, & 8,8      1.5 > 1.75 2.25 2.5 3
Hard 13-16   > 1.5 2 > 2.25 2.75 3

 

Take the indicated % insurance at the appropriate Index #.  > indicates slightly above INDEX #; < indicates slightly below the INDEX #. The index numbers essentially determine the remaining composition of the cards yet to be played.  The remaining composition of cards to be played is the basis for gaining an advantage over the house.

Taking partial insurance should be taken to reduce the variance a player may encounter during play. But it will also reduce the maximum EV.   This helps reduce emotional swings as well as bank roll swings a player will encounter.  This also will add to the confusion of the surveillance crew as they try to evaluate your play to see if you are an advantage player.  It will require a little bit of work to implement but it is well worth the effort for a better mental state and increased longevity.

Special thanks to casino gaming expert Nicholas G. Colon for his review and comments on this piece.

Also to LV BEAR and ZIPPY for helping me clarify my insights

 

Ed Thorp and Max Rubin’s 21st Blackjack Ball

Every year in late January, the most elite professional gamblers in the world gather to attend the super secretive Blackjack Ball.  The gala is hosted by long time organizer and advantage gaming legend Max Rubin.  Max spends countless hours in preparation; creating a magnificent soirée so that this profession’s elite can have a fantastic evening.  And every year Max’s efforts do not disappoint.

The evening starts with drinks and hors d’oeuvres and this gives the guests-many whom have known each other and played together, to converse and about the past years happenings.  Players in the caliber of Bill Benter, James Grosjean and illusive sports better Zeljko Ranogaje are all in attendance.  And this year world class poker icon Phil Ivey even made an appearance. Many of these players have known each other for decade’s and way before their success lead to international recognition.  The Blackjack Ball brings together exceptionally talented people with extraordinary abilities.  This reiterates the idea that great success in one field will lead to great success in another field.

After dinner, voting for the 2017 Blackjack Hall of fame inductee commenced.  To no one’s great surprise Don Johnson was voted in to one of the most exclusive groups in all of gaming, the Blackjack Hall of Fame.  Don is arguably the most famous blackjack player in the world. And his exploits reached legendary status when several years ago he whacked a few Atlantic City casinos for $15 million over a few week period while utilizing there loss rebate programs.  This historic win elevated Don to the top tier of advantage players, prompting all who learned about it to ask what would a person do with such a large win?

Next, the chore of crowning the 2017 world’s greatest blackjack player commenced.  A series of 21 questions are given to the field of attendees.  They are a combination of gaming probability theory questions and general gaming knowledge questions, and they are tough.  The top 5 high scores proceed to the final table where a skills test determines the ultimate winner.  The 2017 Grojean Cup winner took the form of a 15 liter bottle of Luc Belaire Rare Rose Champagne and was awarded to Anthony Curtis, publisher and owner of the Las Vegas Advisor website and owner of the Huntington Press publishing house, the largest publisher in casino gaming related books in the world.  Anthony is also the proprietor of the Gambling with an Edge website.  It was fitting considering that Curtis has taken 2nd Place in 6 of the 20 previous competitions.

Anthony Curtis at the Ultimate Blackjack Tournament photo courtesy Anthony Curtis
Anthony Curtis with the 2017 Grosjean Cup
Close up of the 2016 Grosjean Cup

The 2017 Ball orbited largely around arguably the most influential man in advantage gaming, Edward O. Thorp. In 1962 Thorp published the classic text Beat the Dealer. It was the first book made widely available to the public that showed a firm mathematical approach to beating the game of 21. After this Thorp went on to make noteworthy contributions in Stock Market Analysis, where his original research helped launch the derivatives market.

Ed Thorp in 2015, photo courtesy of Ed Thorp
Ed Thorp at the 2017 Blackjack Ball photo courtesy of Nicholas Colon

In his new book A Man For All Markets, Thorp discusses his whirlwind life and gives a full and complete answer to the question: How did you do it? It’s a must read for anyone who wants a look into the mind of an out of the box thinker who has made a significant impact on the world in so many areas.  Prior to the ball I was able to sit down with Thorp and ask him a few questions.

The importance of Thorps contributions can’t be ignored.  And his original thesis provided the foundation for much of the work that followed. Mike Shackelford the quintessential gaming probability authority and the chief mathematical consultant for Latest Casino Bonuses  and he stated:

“It would be hard to understate the impact Ed Thorp had on the game of blackjack. He was the first to publish both a basic strategy to a wide audience, to get the odds almost break even, and how to beat the game by card counting. His book Beat the Dealer will go down as in history as the quintessential book that changed the game the game.“

The black tie setting of the Blackjack ball is only one-half of the weekend events.  The second part is the after party held at the home of Blackjack hall of famer Richard Munchkin. Food, fun and friends come together on the Sunday after the Blackjack ball to discuss game strategy, new tactics and techniques and most importantly to trade war stories of this unique profession. The Munchkin after-party extends the opportunity for this elite field of players, all of whom are usually spread out all over world to get together and share stories of the last years exploits.

by Nicholas G. Colon

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LatestCasinoBonuses.com Interviews Ken Smith

Known for being an established authority in providing transparency within the gaming community, LatestCasinoBonuses.com recently sat down with Ken Smith for an in depth insight into his prestigious blackjack expertise.

The article includes details of Ken’s background, his first experiences in playing blackjack, tournament advice, his future plans and more.

As Ken was the founder and creator of BlackjackInfo.com, it is an intriguing article I highly recommend all blackjack enthusiasts read.

Interview with Ken Smith of BlackjackInfo.com